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EU Watchdog Urges Tougher Euro Clearing Oversight After Brexit 

May 9, 2017

Huw Jones, Reuters

A draft European Union law on tightening supervision of euro clearing houses in Britain after Brexit would better protect the bloc's financial system, a top EU markets regulator said.

The London Stock Exchange's (LSE.L) LCH clears the bulk of euro-denominated swaps, an activity that will be outside EU jurisdiction from 2019 after Britain leaves the bloc.

Steven Maijoor, chairman of the European Securities and Markets Authority, said on Tuesday that tighter supervision of clearing houses outside the EU was needed to ensure that any risks they pose do not threaten financial stability.

Clearing houses like LCH (LSE.L), Eurex Clearing (DB1Gn.DE) and ICE Clear (ICE.N) stand between two sides of a trade, ensuring its completion even if one side goes bust and clearing trillions of euros worth of derivatives.

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